How good is your decision making?
Bosses and managers make hundreds, possibly thousands of decisions each day. When you arrive at work, before you have even taken your coat off, people will be demanding your immediate attention and with it, a multitude of decisions. “The band saw isn’t working”, “The apprentice hasn’t turned up”, “Supplier X won’t be delivering today”.
Many decisions are made on automatic pilot, but others require more conscious thought. Whilst there are a million and one books on Communication and Body Language, there are comparatively few on ‘Right’ or ‘Robust’ Decision Making.
Most decisions have at least a ripple effect and some can set in motion a positive tsunami. .
Gerald Ratner wiped £500 million from the value of Ratners jewellers in 1991, when he told the interviewers that the reason he could sell his products so cheap was because “they were total crap”. It was this careless remark, that set in motion the decline of Ratners and its subsequent administration.
Other spectacularly poor business decisions include:-
- In 1977, 20th Century Fox signed over of all product merchandising rights for Star Wars to Lucas for a mere 20,000 dollars. Combined revenue on merchandising rose to £250 billion in 2015. http://variety.com/2016/film/news/star-wars-licensed-merchandise-sales-1201799640/
- In 1962 Decca Records told Brian Epstein, the then Manager of the Beatles that “Groups are out, four piece groups with guitars are particularly finished”. The Beatles went on to become a worldwide icon of musical talent.
- In 1999, Excite CEO George Bell turned down the offer to purchase Microsoft for $750,000. The company was valued at $290 billion dollars in 2013.
The time lag before the full impact of a bad business decision is felt can be years.
Shelly Row has posted an article on a model of decision making which considers two dimensions – the number of variables involved and the degrees to which logic or intuition is used in the decision making process. The model can be helpful to think about your usual style of decision making.
Emotional decisions made with little regard for the facts are classified as “Knee Jerk” reactions. “You’re fired!”, “Get rid of him/her”, “Shut up and just get on up there (the ladder)” would all fall into this category and have landed many companies with hefty fines from the Industrial Tribunal or Health and Safety Executive.
‘No Brainer’ decisions are those when the facts are so compelling that there is really only one logical outcome. Paralysis by analysis is close to the Overthinking category. The model is insightful and highlights the significance of “Complex Decisions”, where the variables are many and the uncertainty is high.
In Complex decisions, the variables and potential permutations and combinations can seem infinite. Unlike a chess game, where there is a limit on potential moves, the human element, the unknown and unknowable combine to make Complex Decision making… well … complicated.
Robust Decision Making
Faced with the need for quick operational decisions and robust strategic ones, here is a quick checklist devised by SkillsforSale for ‘robutst’ decision making.
What are the facts?
If facts are available, find them out. Try and get all the facts, not just the facts that support your intuitive perceptions, but also the ones that contradict your expectations. These latter facts may be the most useful.
Ask advice from people who know
Many people find it difficult to acknowledge that they do not know all the answers. Feeling that ‘decisiveness’ is a desirable quality, they leap into a decision without consulting the ‘people that know’. In your company, these may be the people at the sharp end or the ‘coal face’, rather than the managers.
What are the Options?
Is the proposed course of action the only course of action? Is there a different way of looking at the problem, leading to another set of possibilities? Is the tried and tested way of looking at a problem no long relevant? Draw up a list of options. Be wary of the “No,that won’t work” instant response to suggestions.
Will you make the decision alone or involve others?
The final decision may be yours, but consulting with others as part of the process is likely to ensure a much higher degree of commitment and engagement once that decision is made. This is particularly true if you are trying to implement change.
What are the risks?
Assess the risks. Construct a mental checklist that you can cycle through quickly. Who will this decision affect and how? What is the worst case scenario? And the best? What is the risk factor? Is it an acceptable risk?
Will the decision stand up to scrutiny?
Is it robust? Is it consistent with the values, the culture, the trends of your company? Would another, better manager than you, come to the same or similar decision?
Stand by the Decision
Once a decision is made, stick to it, back it, explain it, believe in it, own it.
Count up the Winners and Losers
All those decisions add up… eventually…. to a winning or losing business.
Make sure that yours is a Winner!
SkillsforSale would love to hear your thoughts or experience on this article. Tell us about your best or worst decision, post a comment or send a Guest Blog to firstname.lastname@example.org